Why more and more Japanese startups are looking at India From Japan to India: Panel debates an ecosystem of opportunities

The Japan External Trade Organization (JETRO) is on a mission to strengthen the India-Japan corridor. The organisation, which supports Japanese startups and enterprises either aiming to make their presence felt in the Indian market or hoping to collaborate with Indian players to expand their business globally, also lends its support to Indian startups and companies eyeing the Japanese market.

The company brought together four Japanese startups at TechSparks 2024 to discuss ‘An ecosystem of opportunities: How international startups can expand to India’. The conversation was a deep dive into the opportunities offered by India’s robust startup ecosystem and the various factors that make the country a prime location for international startups. 

The roundtable panellists included Mayank Vishwakarma, Director - Customer Success & Presales, primeNumber; Suguru Kawashima, CFO and Head of Global Business, Findy; Reiji Kobayashi, CEO and Director, Hakki Africa; and Jagjeet Singh, Managing Director, Digireha. Takashi Suzuki, Chief Director General, JETRO, moderated the panel, offering his insights and experiences.

Bringing Japanese companies to India

Suzuki-san, who has been working with JETRO for 30 years, opened the panel discussion by talking about the promise and potential of the Indian startup ecosystem. He shared that one or two Japanese startups approach him every day to understand how they can expand their business or make a connection with Indian partners and set up shop in the country.

He revealed that during his time in India, he began to see an awakening and change in the Indian startup ecosystem, especially post-COVID. Today, as many as 1,400 Japanese companies are established in India. However, these numbers lag behind China, Thailand, Singapore and Malaysia, and only 15% of the Japanese companies in India are small ventures. “Our biggest challenge is how we can promote more small-sized Japanese businesses in India. My ultimate hope is that there is going to be a Japanese unicorn in India, he said. 

What India holds for international startups

Delving into the opportunities that await Japanese entrepreneurs, Suzuki-san asked one simple question: “Why India?”

Vishwakarma spoke about the volumes of relevant data generated in India, citing that as a primary reason for primeNumber to want to expand to the country. He and the panellists concurred that Japanese entrepreneurs hold a common belief that if you can make it in India, you will be successful across the world. He also pointed out that India’s wide consumer base allows the company to soft launch products, get relevant feedback and make adjustments as needed.

Kawashima-san pointed out that India’s talent pool is both wide and deep. Out of the estimated 25 million engineers in the world, four to five million are from India. He emphasised the low cost of labour and credited Indian entrepreneurs with both the grit and talent to make it in the competitive Silicon Valley. 

“I have not seen many Japanese software companies succeed in the world, especially America. So many Indian founders are making their presence felt in California and across the world. I now think we need to attack from India to the global market,” he shared.

Kobayashi-san noted that Japanese companies should look to expand globally, given that the country’s population is declining. He theorised that Japanese companies can learn more from emerging markets, like India.

Navigating the maze of the Indian ecosystem

While India’s immense potential for international enterprises is one side of the coin, the complexity of its regulations, administrative issues, import, and other challenges around running a business in India comprise the other.

Kobayashi-san highlighted certain infrastructure challenges in India, highlighting power outages, infrastructural issues, and water problems. Singh, when asked about the inherent challenges in India’s healthcare sector, revealed that he had enrolled in a course at Indian School of Business, Hyderabad, to understand the sector and convey the right information to his Japanese counterparts.

Panellists also shared that building the right kind of networks and partnerships in the Indian startup ecosystem can help Japanese companies reach a wider audience. Kawashima-san revealed that he made over 1,000 connections on LinkedIn in the last year, and is “slowly meeting the right people to take the business forward in India”. 

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